On Saturday, while most Americans were sleeping, the U.S. Senate passed a bill to overhaul the federal tax system. The bill contained much more than tax policy, including many provisions related to health care. As a professor of health policy, I recalled a similar late-night vote in July. Then, the Senate failed by a single vote to repeal the Affordable Care Act (ACA), and I breathed a sigh of relief. This time, the bill passed by one vote, and my relief is gone.
The Senate bill’s likely effects on typical health policy concerns are substantial and devastating: 13 million people could lose health insurance due to the repeal of the ACA individual mandate, and large future cuts to Medicaid and Medicare are likely in order to compensate for the ballooning deficit. But these consequences on health insurance only scratch the surface of the legislation’s potential public health impacts.
By promoting the interests of the wealthy while shortchanging investments in the social factors that promote health for all of us, the House and Senate tax bills are even more damaging to our nation’s health than repealing the ACA.
Nonpartisan experts, such as the Joint Committee on Taxation, estimate that both the House and Senate bills would increase income inequality, by making the ultrarich richer through individual tax benefits and corporate tax changes that will disproportionately benefit CEOs and wealthy shareholders. Studies show that countries, or states, with wider income inequality have worse overall health.
Beyond increasing inequality, the bills also will chip away at three factors that experts argue are foundational to health: income, education and housing. While long recognized by the field of public health, these so-called “social determinants of health” usually get drowned out in health policy debates by loud shouting matches over access to insurance — as we saw last summer.
First, tax increases will make some low-income and middle-income Americans worse off financially, so they will have less money to spend on health care and other health-promoting resources — such as healthy food or exercise. Income helps people achieve health; higher-income families are healthier than those with lower incomes, at all earning levels.
Second, repealing the state and local income-tax deduction (as both bills do) may put political pressure on local governments to reduce taxes, constraining resources for public schools. Education is an important determinant of health, and greater public school spending (such as through higher teacher salaries) could enhance students’ long-term health. Moreover, the House bill proposes to tax graduate student tuition as income, potentially making it harder for low-income students to achieve graduate degrees and exacerbating a lack of racial diversity in higher education. On a population level, higher educational attainment is associated with better health.
Third, the House bill eliminates low-income housing incentives, which may drive construction of affordable housing to a halt. People without safe and stable housing are more vulnerable to mental illness, substance abuse and exposure to lead. Sky-high housing costs leave residents making choices between medications and rent. A recent report in the Journal of the American Medical Association argued that investing in stable housing improves health.
To be sure, supporters of tax reform argue that certain individuals will be better off financially and that they could use any extra resources to purchase health services for their family. They also argue that restructuring the tax code will create conditions for businesses to expand, hire and increase economic opportunities for employees. And indeed, secure employment is another important social determinant of health.
History tells us, however, who will benefit most from the changes created by this tax bill. Such policies as these will expand the privilege of the already-privileged and increase the power of the powerful.
The World Health Organization, in defining the social determinants of health in a 2008 report, noted that the circumstances that influence health are “shaped by the distribution of money, power and resources at global, national and local levels, which are themselves influenced by policy choices.” The policy choices made in these two bills — expanding uninsurance and income inequality, while eroding investments in public education and affordable housing — will lead to greater health inequity and poorer health overall in the U.S. population.
Sarah E. Gollust is an associate professor in the Division of Health Policy and Management at the University of Minnesota School of Public Health.